Section 8 Fair Market Rent (FMR) for ZIP 07043 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Housing Authorities Serving ZIP 07043

• Newark Housing Authority (Newark, NJ) - 8,481 Section 8 vouchers
• Paterson Housing Authority (Paterson, NJ) - 3,000 Section 8 vouchers
• Housing Authority of the City of Passaic (Passaic, NJ) - 2,159 Section 8 vouchers
• East Orange Housing Authority (East Orange, NJ) - 1,596 Section 8 vouchers
• Passaic County Public Housing Agency (Wayne, NJ) - 842 Section 8 vouchers
• Housing Authority of the City of Orange (Orange, NJ) - 748 Section 8 vouchers
• Irvington Housing Authority (Irvington, NJ) - 474 Section 8 vouchers
• Montclair Housing Authority (Montclair, NJ) - 325 Section 8 vouchers
• BLOOMFIELD TOWNSHIP HA (Bloomfield, NJ) - 275 Section 8 vouchers
• Clifton Housing Authority (Clifton, NJ) - 270 Section 8 vouchers

The Section 8 cap rate analysis for ZIP code 07043 reveals a significant gap between the federal market rent (FMR) and the market rent, impacting potential investment returns.

With an annualized 2BR FMR of $2860 for FY 2024, the implied gross yield for a property in ZIP 07043 is calculated as follows:

• Federal Market Rent Scenario: At $2860 per month, the annual rent would be $34,320. Given the median home value of $1,370,131, the gross yield is approximately 2.5%. This calculation is based on the assumption that the property's value aligns with the median home value in the area.

In contrast, using the ZORI (Zillow Observed Rent Index) market rent figure of $3,340 per month, the annual rent would be $39,960, resulting in a gross yield of about 2.9% when compared to the same median home value.

• Market Rent Scenario: The higher monthly rent of $3,340 translates into a slightly better gross yield of 2.9% annually. This scenario assumes that the property can command the market rent, which is more favorable for investors seeking higher returns.

Given the 14.7% renter density in ZIP 07043, it is important to consider the likelihood of securing tenants willing to pay the market rent versus those eligible for Section 8 housing assistance. The N/A-day DOM (days on market) suggests that rental listings may move quickly once they are posted, indicating a potentially competitive rental market. However, the limited availability of data on DOM makes it difficult to draw firm conclusions about the speed at which properties are leased.

The gross-yield comparison clearly shows that relying on market rents rather than FMRs yields a better return for investors. However, the actual feasibility of achieving these rates depends on the local demand for rental properties and the specific requirements of Section 8 participants. For landlords and small-portfolio investors, understanding the dynamics of both FMR and market rents is crucial for making informed decisions about the profitability of properties in ZIP 07043.

Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).

About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.